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THE CLEARING HOUSES IN THE COUNTRY.

[Statement prepared by the chairman of the committee.)

The clearing house has become indispensable to the conduct of the business of banking. Each bank, large or small, country or city, is indissolubly connected with other banks, and through them, if not directly, with the clearing house. The efficiency of a bank is very largely dependent upon the clearing house. Only through clearing houses can the equality and independence of banks be preserved or their highest efficiency attained.

It is as necessary to banks to have incorporated clearing houses as it is to business firms and corporations to have incorporated banks. The incorporation of neither is absolutely necessary. In fact, a large part of banking is done by private firms, but only by reason of the existence of banking corporations” are they successful. All the banking of the world, or of the country, could not be done outside of the obli. gations and responsibility imposed in fixed legal rules and the control of banks by positive corporation law. Whatever may be the appearances to the contrary, a bank can not exist by itself alone in this stage of commercial development, like a cotton or woolen factory, which is all the more reason for uniform regulation and control of banks by law.

Of seventy-six clearing houses given on page 551 of volume 1, Report of the Comptroller of the Currency for 1897, I have examined the constitution and by-laws of fifty-five at hand, and herein indicate the main provisions of all taken together. I see no reason why each one of these clearing houses could not continue, if incorporated under the Walker bill (H. R. 10333), the doing of its business in such manner as it has chosen for itself and without any substantial alteration of its constitution or by-laws. Of course, the advantages of a broader field and the security of more definite rules, by many of them, are so obvious, it is believed they would soon enter upon a broader and at the same time equally conservative action. There are no substantial provisions in the regulations of any of the fifty-five examined not given under the name of some one of them. None contains any substantial provisions not enumerated under the name of some one of those mentioned. Some forbid what others require, according to the volume or kind of business they do.

ST. LOUIS, MISSOURI.

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Article 1, section 1. “The object of the association shall be the effecting, at one place, of the daily exchanges between the several associated banks and bankers,

and the fostering and promoting of sound conservative banking; * the regulating of exchanges, the fixing of minimum rates to be charged on outside drafts and collections,” etc.

Section 3. The committee of management shall have power to suspend any bank by unanimous vote

* but shall forthwith call a meeting of the association to consider such suspension, etc.

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each year

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Section 8. The action of the clearing house is only that of an agent, and in no case shall this association be held responsible for any loss that may occur by reason of its action.

Section 11. Whenever any member of the association shall send and receive through the clearing house the exchanges of any bank in the city or vicinity who are not members, such sending and receiving shall ipso facto and without further notice constitute said member the agent for said bank at the clearing house, etc.

Section 13. A standing committee of five bank officers or bankers shall be elected, to be called a committee of arbitration, whose duty it shall be to hear and determine all disputes that may be submitted to it by both parties thereto.

A majority decision shall be valid. Section 15. No member shall be added to this association having a paid-up capital of less than $500,000.

Section 17. Shall pay an entrance fee of $1,000 and in addition its several assessments for expenses.

Article 2, section 1. Each member of the association shall furnish the manager a sworn statement of its condition as often as five times

and at such other times and of such date as the clearing-house committee may require. The following shall be regarded as cash reserve, viz:

Balances due from other banks payable on sight draft,
Silver,
Gold,
Legal tenders,
National-bank notes,
Gold and silver certificates,
Amount due United States Treasurer,

Clearing-house loan certificates. Section 2. Upon a vote of four-fifths of the members of this association a committee of five shall be elected by the association, who may receive from banks, members of the association, bills receivable and other securities to be approved by it, and shall be authorized to issue therefor to such depositing bank loan certificates to an amount not to exceed 75 per cent of the face value of the securities or bills receivable so deposited, etc.

ROCHESTER, NEW YORK. Section 24. No member of this association shall clear for any other institution or banking firm not a member.

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BUFFALO, NEW YORK. Section 7. Any bank, after one day's notice of a hearing before the association, may be expelled from the association and debarred from all the privileges of the clearing house by a four-fifths vote of the whole number of associated banks.

Section 8. The clearing-house committee, acting in concurrence with the arbitration committee, may cause an examination to be made of any bank member of the association

and shall have power to suspend any bank, etc. Section 19. Balances shall be paid in

United States Treasury certificates.
United States legal-tender notes.
National-bank notes.
Gold coin.
Gold certificates.
Silver certificates.

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Section 25. This association shall receive

on special trust such United States gold coin as any member

may choose to send to it for safe-keeping, for clearing-house purposes; tificates in exchange for such coin shall be issued to the depositing bank in denominations of $5,000, etc.,

negotiable only among banks, members of the association, etc.

Section 26. Each bank member of the clearing-house association shall furnish the manager a weekly statement of its condition, signed by its officers, on uniform blanks provided by the association, for the private use of each member, showing the average amount of

1. Loans aud discounts.
2. Deposits.
3. Due from banks.
4. Checks for next day's exchanges.
5. Clearing-house gold certificates.
6. All other currency.
7. Rediscounts.

BALTIMORE, MARYLAND.

Section 5. The executive committee are authorized to take into consideration and investigate any and all matters affecting and pertaining to the banking interests of the city which may be referred to them in writing by this association or any member thereof; to report to the association such recommendation in the case as they may deem wise and proper. Whenever they consider it for the interests of the association they are empowered to require from any member securities of such an amount and character as they deem sufficient for the protection of the balances resulting from exchanges at the clearing house. State banks, members of the clearing-house association, shall be examined in the same manner as national banks and by the national-bank examiner, etc.

Section 6. Be a depository of such moneys as any associated bank may desire, shall remain a special deposit for safe-keeping, and issue therefor certificates in concurrent amounts, etc.

Section 7. The compensation to the depositing bank shall be paid by the several banks in proportion to their respective capitals, at the rate of 30 cents per annum on each $1,000 of capital stock.

SAN FRANCISCO, CALIFORNIA.

Article 14. The debtor banks shall pay to the manager at the clearing house in

Gold coin,
Clearing-house certificates it has issued, or
Gold certificates.

CHICAGO, ILLINOIS.

Section 20. All moneys paid in shall be in

Gold coin,
Legal-tender notes,
Treasury certificates,
National bank notes,
Its own clearing-house certificates.

WASHINGTON, DISTRICT OF COLUMBIA.

Article 16. The clearing-house committee shall have full power and authority at any time to direct an examination, by any three of its members, into the affairs and condition of any member

for the use and information of the other members of the association, but to be otherwise confidential.

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LEXINGTON, KENTUCKY. Article 11. No money shall pass through the clearing house in making the exchanges. [Persons unfamiliar with banking will find such “clearings” are fully described in a monograph on Money, Trade, and Banking, by J. H. Walker: Boughton, Mifflin & Co., Boston.]

SALT LAKE CITY, UTAH.

Article 3. The members are:

Wells, Fargo & Co.,
The Deseret National Bank,
W. S. McCormick & Co.,
T. R. Jones & Co.,
The Union National Bank,
The Commercial National Bank,
Utah Commercial and Savings Bank,
State Bank of Utah,
National Bank of the Republic,
Bank of Commerce,
Utah National Bank.

FORT WORTH, TEXAS.

Section 8. Debtor banks shall pay to the manager of the clearing house the balances due from them either in

Gold coin,
United States notes, or
National-bank bills.

KNOXVILLE, TENNESSEE. Section 17. Applications for membership must state, if a bank, its capital; if a private banking house, names of individual partners, name of person authorized to sign, etc.

NORFOLK, VIRGINIA.
Section 12. The balances due the clearing house shall be paid in

Currency or

Gold coin,
and shall be put up in packages of $500, etc.

Section 13. The executive committee shall require from each member of the association securities of such amount and character as said committee may deem sufficient for the protection of balances resulting, etc., or other satisfactory guaranties.

Section 15. Be a depository to receive in special trust such currency as any of the members may choose to send to it for safe keeping.

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DAYTON, OHIO.

Section 14. The expenses of the clearing house shall be paid equally by each member of the association.

PORTLAND, MAINE.

Article 13. The debtor banks shall pay to the manager of the clearing house in

Gold coin, or in its own

Clearing-house certificates, the balances due, etc.

Article 15. Gold coin of the quantities of $20,000, $10,000, and $5,000, for the payment of balances, shall be brought in sealed bags, etc. Article 17. Clearing-house certificates payable in

Gold coin.

WILMINGTON, DELAWARE.

Section 9. The character of the funds to be used in payment of balances to or from the clearing house will be Philadelphia or New York exchange, excepting for amounts less than $1,000, which may be in currency, at the option of the payers.

SYRACUSE, NEW YORK.

Article 3, section 2. Private bankers membership by a two-thirds vote.

may be admitted to

LOUISVILLE, KENTUCKY.

Article 10. Each member of the association shall furnish the man. ager, on the first Monday of each month, a statement in tabular form of the averages for the month previous of its

Capital,
Surplus,
Loans,
Cash on hand,
Eastern exchange,
Due from banks other than Eastern,
Bills payable,
Rediscounts,

Deposits,
which shall be open to the principal officers of any member.

KANSAS CITY.

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Section 7. May examine any bank belonging to the clearing house and require any and all members to deposit

securities of such an amount and character as shall be satisfactory to the clearing house for the purpose of securing any debt balance that may occur in the adjustment of clearances against the member making such deposit, etc.

Shall receive bills receivable and other securities and issue therefor

loan certificates to an amount not exceeding 85 per cent, etc.

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